World Gold Council - All posts tagged World Gold Council

After decades of allegations of manipulation and more recent lawsuits and controversy surrounding the London Gold Fix, the World Gold Council held a forum to discuss the reform or replacement of the price mechanism on Monday.

Reuters

“There was strong support for the World Gold Council’s key principles for reform. We believe it should be based on executed trades and a tradable price, it should have highly transparent input data, should be calculated from a deep and liquid market, and represent a physically-deliverable price,” said Natalie Dempster, managing director of central banks and public policy at the WGC, in a press release.

The forum brought together 34 delegates from the industry who stressed the importance of a local London price, “which would reflect both the deep pool of liquidity available in London as well as London’s historic and current position as the primary trading center for gold,” the WGC said.

The World Gold Council expects Chinese demand for gold bars and coins to climb 25% by 2017 from last year’s record level, according to a report issued Tuesday.

The report came out on a day when prices for gold futures on the Comex division of the New York Mercantile Exchange were suffering from a hefty decline. Gold for June delivery
was last down $26.40, or 2%, at $1,301.40 an ounce, pulling back after closing at a three-week high a day earlier.

Demand for gold bars and coins from China reached a record of 397 metric tons in 2013, up 38% over the previous year, with the climb “connected to the relatively limited set of investment options for savers in China,” the WGC said. Read the full report.

Demand for physical gold in the third quarter fell 21% from the same time a year ago, but consumer demand rose to a record for the first nine months of the year, with most of that growth coming from Asia and the Middle East, the World Gold Council reported on Thursday.

Demand for the quarter totaled 868.5 metric tons, with the WGC attributing the decline to further outflows of western investors’ positions in exchange-traded funds.

Shares of the gold-backed SPDR Gold Trust ETF
were down by around 24% year to date as of Wednesday. Gold futures prices
, meanwhile, have lost more than 23% this year.

Gold demand was valued at $37 billion in the third quarter, the WGC said in its latest Gold Demand Trends report. That’s down 37% from a year ago and the lowest quarterly value since the first quarter of 2010.

A report titled “The Direct Economic Impact of Gold” released Tuesday from the World Gold Council and PricewaterhouseCoopers has quite a few mind-boggling statistics on the precious metal.

Among the key findings included in the report: gold mining, in terms of supply, contributed over $78.4 billion to the economies of the top 15 mining countries in 2012. That’s equivalent to the gross domestic product of Ecuador.

AFP/Getty Images

“From mining and refining, to fabrication and consumer demand, it is clear that gold makes a positive contribution to economic growth along the entire value chain,” said Terry Heymann, Director of Gold for Development at the World Gold Council, in a statement.

Overall gold demand fell in the second quarter to its lowest value in dollar terms in more than three years, with the biggest hit coming from outflows among exchange-traded funds, according to the World Gold Council’s quarterly report on gold demand trends released Thursday.

Second-quarter demand fell 12% in tonnage terms to 856.3 metric tons, compared with the same quarter a year ago. In dollar terms, demand dropped 23% to $39 billion.

The biggest reason for the demand decline came from a wave of outflows from exchange-traded funds, the WGC said, as western investors reacted to a “seemingly more positive outlook for the U.S. economy and an eventual tapering of quantitative easing.”

Official reserves of global central banks grew to more than $12 trillion in 2012, from $2 trillion in 2000, the WGC said.

Data showed a significant shift away from the U.S. dollar over that 12-year period, and the share of “other” currencies in reserves has tripled in absolute terms since 2008, it said. Dollar holdings by central banks fell from 62% to 54% of total reserves between 2000 and 2012, according to the report.

Gold futures prices scored a weekly gain after posting a fourth-straight monthly decline. That sounds good and bad, but it works out great for the overall theme of mixed sentiment on gold that appears to be forming.

In a report Thursday, the World Gold Council touted the benefits for emerging-market investors to use gold to cut their risks associated with exchange-rate volatility.

“Gold’s unique characteristics as an asset and currency hedge are particularly relevant to investosr with emerging-markets exposure, where currencies and asset prices are more vulnerable to price swings and tail-risk events,” said Juan Carlos Artigas, global head of investment research at the WGC.

About The Tell

The Tell is MarketWatch’s fast and engaging look at trends and themes in the day’s markets. Drawing on our reporters, analysts and commentators around the world, as well as selecting the best of the rest online, The Tell is all about the pulse of the markets through news, insight and strategic information to help you make the best investing decisions. Got a tip? Tell us at TheTell@MarketWatch.com